04/07/14 -- EU grains markets ended a quiet day narrowly mixed. With US markets shut for their July 4 celebrations this was always likely to be a dull affair, and so it proved.

The day finished with Jul 14 London wheat up GBP0.20/tonne at GBP132.20/tonne, and with new crop Nov 14 London wheat also GBP0.20/tonne higher at GBP134.50/tonne. Nov 14 Paris wheat ended EUR0.25/tonne firmer at EUR184.50/tonne, Aug 14 Paris corn was down EUR0.25/tonne at EUR171.00/tonne, whilst Aug 14 Paris rapeseed rose EUR0.25/tonne to EUR337.75/tonne.

For the week that still puts Jul 14 London wheat GBP8.80/tonne lower, with Nov 14 down a more modest GBP3.10/tonne. Front month Paris wheat ended the week with losses of EUR3.25/tonne, with corn down EUR1.50/tonne and rapeseed losing EUR10.00/tonne.

Harvest pressure and sharply lower US markets following Monday's bearish USDA stocks and acreage reports piled more pressure onto EU grains this week. The pound closed the week at multi-year highs around 1.7150 versus the US dollar and over 1.26 against the euro.

Russia's harvest is gathering momentum, and yields are up on where they were 12 months ago. The Russian Ministry said today that 2.3 million ha have now been cut, which represents almost 5% of the intended area. That's already produced a crop of 8.3 MMT, with average yields coming in at 3.68 MT/ha, a more than 11% increase on 3.31 MT/ha this time a year ago.

Wheat accounts for 5.5 MMT of that total, with yields at 3.78 MT/ha, a more than 10% increase on 2013.

The Russian Ministry also reported that wheat exports in the Jan-May period totalled 5.3 MMT, a sharp increase on only 921,600 MT in the same period in 2013.

Traders report that around 80 TMT of new crop wheat has already been shipped out of the Azov Sea this week, where prices for 12.5% milling wheat are said to be around $222-225 FOB, which is the equivalent of around GBP130/tonne. The same quality Russian wheat FOB ports on the Black Sea is priced at around $252 FOB, which is around GBP147/tonne.

Ukraine wheat meanwhile is reported as having traded at less than that delivered into the Turkish port of Marmara yesterday, around GBP146.40/tonne including freight. Ukraine corn meanwhile is now under $200 FOB for new crop November shipment, that's less than GBP115/tonne.

The Ukraine Ministry said that they'd exported 160 TMT of grains in the first three days of the new 2014/15 season, including 79 TMT of barley and 75 TMT of wheat, with a further 150 TMT loaded on vessels waiting to sail.

FranceAgriMer said that the French winter barley harvest was already 44% complete as of Monday, up from 6% a week ago and compared to nothing at all in 2013 at this time. They've even made a start on the spring barley harvest. Meanwhile 99% of the French corn crop now has at least 6-8 leaves visible compared to only 78% this time last year.

They estimated that 69% of the French wheat crop is in good/very good condition, unchanged on a week ago and one point down on this time last year. French winter barley good/very good was pegged at 70% compared to 67% last week and 68% this time in 2013. Corn was rated 83% good/very good, 2 points down on last week but much higher than only 55% a year ago.

04/07/14 -- Given that half the roads in town are closed due to the bloody "le Tour" malarky, I'm working from home today, which gives me the opportunity to do a bit more blogging.

It's appropriate then to talk about cycling, or cycles to be a bit more specific. Cyclical movements in wheat prices to be even more specific.

Personally, I'm a firm believer in cycles within cycles. I've put up my seasonal 20 year London wheat chart on here before. I couldn't find one anywhere, so I made this one myself. Getting all the data together took some time I recall, so it's not an exercise I'm looking to repeat in a hurry, unless somebody wants to pay me to do it for them?

This chart includes 20 years worth of data running from 1991 to 2010. Like I say, I haven't updated it since due to the amount of work involved. The fact that it doesn't include the last couple of crazy years in some sort of way I find comforting. Or maybe non-distorting might be a better way of putting it.

The chart for comparison below it is 2014 so far. The similarities are clear for all to see. At a glance it would appear that IF 2014 were to follow the "normal" 20 year trend then there maybe isn't too much further down side in the market. The End (Of the recent demise of London wheat) Is Indeed Nigh. Or it will come in August at any rate.

Phew! Many of you will say. I'd better start thinking about getting some bought then, others will be say. But as ever, this isn't 100% foolproof. I mean, if it was then you wouldn't be reading this would you?!

If we have a look at another chart, then it would appear that London wheat has now broken through a long-held resistance level around the upper the £130's to £140 mark.

You can click on these charts to enlarge them by the way, there's no need to reach for a magnifying glass.

Now, IF we are to remain below this resistance level for a while, then you could say that we are actually playing out part of a bigger cycle The one that we've been in, where the upper £130's to £140 mark is resistance, is merely a small cycle within a BIG cycle.

The BIG bike hasn't been out of the shed for a few years, four of them in fact, but when it last was out of the shed the upper £130's to £140 level were just a pipe-dream, or a distant memory - we have of course been here before.

Cue mental image of farmer waking up one morning in early 2010, with shall we say, obvious signs of feeling amorous. The farmer's wife says "have you been dreaming about a threesome with me and Kylie again?" and the farmer says "no darling, I just dreamed that I could make £130/tonne ex farm for feed wheat."

The point is is that the £140 level that we are now below isn't really a long term resistance, it's only a relatively short-term one that dates back less than 4 years. IF we are now back riding the BIG bike then there could be plenty more downside yet. The End Is Nigh is you are a grower then, in a different sort of respect.

For those of you that are able to watch You Tube (as many of the big corporates have it banned by the in house Fun Police) then this video makes interesting viewing, even if the guy concerned does make the faux pas of suggesting that Paris Rapeseed is still prices in French Francs!

03/07/14 -- Soycomplex: Beans closed a holiday-shortened session lower. Weekly export sales came in at 40,600 MT of old crop and 431,200 MT for new crop. Trade expectations were 0-150,000 MT of old crop and 300,000-500,000 MT of new crop, so there were no shocks there. The usual suspects of unknown destinations (206,000 MT) and China (168,000 MT) were the featured buyers on the new crop. Informa Economics pegged US 2014 soybean production at 3.7 billion bu, up from 3.6 billion previously, sticking by their yield estimate of 44.5 bu/acre. "Adopting Informa’s production estimate with its prior demand outlook and coupling with USDA carryin of 125 million, 14/15 ending stocks are seen rising to 405 million," said Benson Quinn Commodities. That's substantially higher that the USDA’s June estimate of 325 million. The USDA will update us with their July S&D numbers on Jul 11, factoring in Monday's new record acreage estimate. MDA CropCast increased their forecast for the US 2014 soybean crop by 3.8 MMT from last week to 100.79 MMT a 14 MMT, or 16%, rise on last year's output. The FAO left their forecast for the world 2014/15 soybean crop unchanged on a month ago at 283 MMT, up 16 MMT on this year. The see 2014/15 ending stocks up 3 MMT versus this season at 31 MMT, which is also unchanged from their June forecast. In Argentina, there's a Rosario port workers strike lined up for tomorrow. South Korea's NOFI passed on a tender for 55,000 MT of South American meal for Nov shipment saying that prices were too high. South Korea's KFA were said to have bought 60,000 MT of US, South American or Chinese meal for Dec shipment. Jul 14 Soybeans closed at $13.87 3/4, down 4 3/4 cents; Nov 14 Soybeans closed at $11.33 1/2, down 8 cents; Jul 14 Soybean Meal closed at $447.00, down $5.30; Jul 14 Soybean Oil closed at 38.56, up 9 points. For the 4-day week that puts front month beans down 44 1/4 cents, with meal down $22.80 and oil shedding 142 points.

Corn: The corn market closed a couple of cents lower heading into the long weekend. The Chicago markets won't be open again until Monday afternoon UK time. There's no Globex market tomorrow or Monday morning. Weekly export sales came in at 290,700 MT on the old crop and 474,700 MT on the new. That was in line with trade estimates for sales of 500-800,000 MT for both crop years combined. Once again there were sizeable cancellations from unknown destinations (182,500 MT) - China? Under the daily reporting system the USDA announced 176,000 MT of new crop US corn sold to Egypt. Informa estimated the US 2014 corn crop at 13.731 billion bu, using a harvested acreage number of 83.24 million acres, and a yield figure of 165 bu/acre. Their previous estimate was for a crop of 13.766 billion bu, with yields at 163 bu/acre. MDA CropCast also marginally trimmed their forecast for this year's US corn crop, down 0.3 MMT to 354.2 MMT, although that's still a near 2% increase on last year's 347.7 MMT. The FAO raised their forecast for the world 2014/15 corn crop by 13 MMT from last month to 1001 MMT. That's now fully 20 MMT higher than the USDA's current forecast. They also increased their estimate for carryout next season by a rather hefty 31 MMT, taking ending stocks to 200 MMT - 27 MMT more than this year and over 17 MMT above where the USDA stand. The 2014/15 production increase came mostly on the back of improved outlook for crops in the EU and the US, they said. "Utilization in 2014/15 (is) lower than was expected earlier, primarily on reduced industrial use in China. Ending stocks are raised compared to the previous month, driven by expectation of much higher carryovers in China and the US," they added. Jul 14 Corn closed at $4.17, down 1 1/2 cents; Sep 14 Corn closed at $4.09 1/2, down 2 3/4 cents. For the holiday-shortened week that puts Jul 14 corn 26 cents lower.

Wheat: The wheat market was mostly higher in pre-long weekend book-squaring and consolidation. Weekly export sales of 567,500 MT beat trade expectations of 300-450,000 MT thanks to Brazil taking 140,500 MT. They have been widely reported to have featured as a big wheat buyer of late since the government temporarily removed the 10% import duty. Informa estimated the US all winter wheat crop a bit below the USDA's 1.381 billion bu at 1.369 billion, and down from their previous forecast of 1.396 billion. The FAO raised their outlook on the global wheat crop in 2014/15 by 4 MMT from last month to 707 MMT. That increase came "mostly on improved prospects in Brazil, the EU, India and Russia, more than offsetting downward adjustments in Pakistan, Ukraine and the US," they said. They cut 2014/15 ending stocks however by 2 MMT to 180 MMT, although that's still 6 MMT up on 2013/14. "In Canada, overall conditions of seeded crops remain generally favourable, however concerns increased in the Prairie region due to stormy, wet, and unseasonably cool weather," they noted. MDA CropCast increased their US all wheat production estimate by 1 MMT from last week to 56.5 MMT, although that's still down 3.7% on last year's output. The UkraineAgriBusinessClub forecast the grain harvest there around 12% lower than last year's record at 55-56 MMT. They see exports 19-22% lower at 26-27 MMT. The Ukraine wheat crop was estimated at 21.2-22.2 MMT versus only 20 MMT from the USDA. They see barley production at 6.8-7.3 MMT, which is in line with the USDA's 7 MMT forecast. Jul 14 CBOT Wheat closed at $5.68, up 6 1/4 cents,; Jul 14 KCBT Wheat closed at $6.97, up 14 cents; Jul 14 MGEX Wheat closed at $6.51 1/4, down 1/2 cent. For the short week that sees Chicago wheat down 17 1/4 cents, with Kansas down 29 cents and Minneapolis falling 31 3/4 cents.

The day ended with the thinly-traded and soon to expire Jul 14 London wheat contract down GBP2.00/tonne at GBP132.00/tonne and with the more liquid new crop Nov 14 London wheat closing GBP0.05/tonne higher at GBP134.30/tonne. Nov 14 Paris wheat closed unchanged at EUR184.25/tonne, Aug 14 Paris corn was up EUR1.50/tonne at EUR171.25/tonne and Aug 14 Paris rapeseed was EUR0.25/tonne firmer at EUR337.50/tonne.

This was a new lowest close for a front month in London wheat in 4 years for the third session in a row. The soon to be new front month, Nov 14, could only manage nominal gains having traded both sides during the day, as the spread between Nov 14 and Nov 15 widened to GBP8.95/tonne.

The weak euro continues to support Paris wheat a little. Conversely, the strong pound remains a millstone around the UK market's neck.

The FAO increased its forecast for global cereals ending stocks in 2014/15 to the highest since 2001. The world wheat crop was increased by 4 MMT from last month to 707 MMT, with the global corn crop upped by 13 MMT to 1001 MMT.

For wheat "overall yields in the US are expected to be down due to the drought in the Southern Plains. In Canada there is increased concern over continued frequent rains and cool temperatures particularly in the Prairies region, though conditions of seeded crops remain favourable. In the EU, Russia, Ukraine and China conditions are mostly favourable," they said.

Despite the production increase, world wheat ending stocks were actually reduced by 2 MMT to 180 MMT, although that's still 6 MMT more than at the end of 2013/14. Corn carryout at the end of 2014/15 was increased by a whopping 31 MMT from last month to 200 MMT, "driven by expectation of much higher carryovers in China and the US." That's now 27 MMT more than at the end of 2013/14.

They estimated the EU-28 wheat crop at 147.3 MMT, a 2.7% increase on last year, 1 MMT more than the USDA and a total only beaten once before - in 2008. The EU-28 corn crop was forecast to rise to 66 MMT.

They pegged the Russian grain crop at 87.9 MMT, which is similar to their estimate of last year. They said that Ukraine's crop will fall 9% to 57.1 MMT "as yields are projected to return to average, after record levels in 2013."

A report on Reuters said that German farmers are holding back on selling new crop wheat ahead of harvest due to the low prices on offer. Buyers bids are currently said to be around EUR4/tonne over Paris futures. With low interest rates, many are said to be talking about taking out loans to cover their financial needs and storing their new crop instead if they are able. That's scenario that's likely to be replicated elsewhere in Europe too, if sufficient storage and easy credit is available.

The first wheat cuttings in France are said to be displaying reasonable protein levels.

The final week of June saw 285 TMT of soft wheat export licences granted in Brussels, taking the now finished 2013/14 marketing year total to a record 28 MMT, up 48% on a year ago. Licences were also granted for 146 TMT of corn imports, taking the seasonal final total to 14.5 MMT, a 34% jump versus 2012/13.

As one season ends another begins, and the new one is already echoing the old. Soft wheat export licences for the partial first week of July totalled 21 TMT versus corn import licences of 132 TMT.

At home, Defra said that 505.7 TMT of wheat was milled in the UK in the 4 week period to May 24, a 1.2% rise on 12 months previously. The percentage of home grown wheat included in the grist was up from only 61.6% in the quality troubled year that was 2013 to a more normal 81% this year.

Overall though, for the 47 weeks to May 24, the percentage of home grown wheat used was only up marginally, from 73.9% in 2012/13 to 76.8% in 2013/14.

02/07/14 -- Soycomplex: Beans closed lower in what looks like consolidation ahead of the long weekend. The market will also only operate a holiday-shortened session tomorrow, so expect volumes to be light. Fund money was estimated to have trimmed a further 2,000 contracts off their rapidly reducing long holding in beans. We won't now know exactly where they stand until Monday, as the usual Friday Commitment of Traders report is delayed until then. China sold only 106,000 MT of the 355,000 MT of soybean reserves offered up at auction yesterday. There are some reports suggesting that stocks at the ports are high, which may limit imports in the short-term. There's also market talk that the Chinese are looking to resell/wash out Brazilian bean purchases for August shipment. They may not find US buyers quite so keen to book that position as their own harvest will be underway in the south by then. Taiwan Sugar Corp are said to be seeking 15,000 MT of US beans for Aug shipment. Rabobank forecast CBOT soybean prices at $11.20 in the final quarter of 2014. Informa are due out tomorrow with their US and world production estimates. Last time they gave us a US soybean yield of 44.5 bu/acre, and a crop of 3.591 billion bushels. Trade estimates for tomorrow's weekly export sales report are 0-150,000 MT of old crop and 300,000-500,000 MT of new crop. Jul 14 Soybeans closed at $13.92 1/2, down 7 1/2 cents; Nov 14 Soybeans closed at $11.41 1/2, down 6 cents; Jul 14 Soybean Meal closed at $452.30, down $3.80; Jul 14 Soybean Oil closed at 38.47, down 40 points.

Corn: The corn market ended around 4 cents lower, with the new crop Dec 14 future setting a lifetime contract low and looks like it may be setting it's sights on testing the $4/bu mark. I would imagine that there would be good buying interest if it did fall below that level. South Korea Kocopia bought 55,000 MT of corn, thought likely to be of US or South American origin, for Nov shipment. China continue to attempt to auction off large volumes of state-owned corn stocks. A report on Reuters suggested that the Chinese government may decide to scrap its corn stockpiling scheme by as early as next year. Ukraine said that it had exported a record 20.1 MMT of corn in 2013/14. Russia said that it had also exported a record volume, in excess of 4 MMT. Informa are due out tomorrow with their latest US and world production numbers. Last month they estimated 2014 US corn yields at 163.5 bu/acre, producing a crop of 13.766 billion bushels. Rabobank forecast Chicago corn prices to fall to a very precise $4.07/bu in the final quarter of 2014. The Energy Dept reported US ethanol production at 953k barrels/day last week, up 15k bpd from the previous week. Trade estimates for tomorrow's weekly export sales report are around 500-800,000 MT for both crop years combined. Fund selling in corn was estimated at a net 5-6,000 lots on the day. That would place them dumping around 30,000 contracts for the week so far. Jul 14 Corn closed at $4.18 1/2, down 4 1/4 cents; Dec 14 Corn closed at $4.18, down 4 3/4 cents.

Wheat: The wheat market closed all over the place, from a few cents higher in Chicago to 17 cents lower in Kansas. The wheat harvest is now in full swing in Kansas, the leading wheat producing state in the US. Yields are highly variable, but generally disappointing. Nevertheless, it was the Kansas wheat market that fell the hardest today, in what looks like "buy the rumour, sell the fact" trade. Unwinding of long Kansas, short Chicago wheat may also have been a feature. There's talk that Brazil may have bought up to 1.0 MMT of wheat since the government cut non-Mercosur wheat import taxes to 0% - much of that is likely to be US sourced. Ukraine said that they'd exported 9.4 MMT of wheat in 2013/14. Russia's final exports are likely to be around 25.5 MMT. Early Russian wheat yields from the 2014 harvest are said to be averaging 3.88 MT/ha, a more than 10% increase on this time last year. This of course is winter wheat, spring wheat yields may not produce such impressive year-on-year results. After a spate of recent purchases, Egypt’s supplies minister said that the country has enough wheat supply to meet demand for the next 6 months, but then again they always say that. Jordan cancelled a tender for 100,000 MT of optional origin hard milling wheat for Dec-Jan shipment. Rabobank forecast Chicago wheat prices at $5.50/bu in the final quarter of the year. Trade estimates for tomorrow's weekly export sales report are 300-450,000 MT. Jul 14 CBOT Wheat closed at $5.61 3/4, up 2 cents; Jul 14 KCBT Wheat closed at $6.83, down 17 cents; Jul 14 MGEX Wheat closed at $6.51 3/4, down 5 1/2 cents.

02/07/14 -- EU grains closed mostly lower, with nearby Jul 14 London wheat sliding to a new lowest close for a front month in 4-years and Nov 14 setting a fresh contract lifetime low of GBP133.50/tonne.

The day ended with Jul 14 London wheat down GBP1.50/tonne at GBP134.00/tonne, and with new crop Nov 14 GBP0.25/tonne lower at GBP134.25/tonne. Nov 14 Paris wheat was unchanged at EUR184.25/tonne, Aug 14 Paris corn slipped EUR0.25/tonne to EUR169.75/tonne and Aug 14 Paris rapeseed finished EUR3.00/tonne weaker at EUR337.25/tonne.

It is worth noting the recent movements of the Nov 14 and Nov 15 London wheat future. The latter contract was a GBP0.50/tonne discount to Nov 14 at the end of March, and tonight it's a GBP8.75/tonne premium.

The weak euro, and concerns that milling wheat quality may have been harmed by rain in some parts of Europe, added a little bit of support to Paris wheat.

London wheat remains under pressure from the very strong pound and ideas that less milling wheat in some places, particularly Eastern European countries, means more feed wheat around. And that's more feed wheat in the hands of traditionally eager post-harvest sellers. Corn meanwhile continues to pour into Europe if last week's import licences are anything to go by.

Better construction figures than the market expected and news that UK house prices had now surpassed the 2007 peak, helped and already buoyant pound. Nationwide said that UK house prices are now up 11.8% on a year ago. London house prices are up 26% year-on-year, the largest annual increase since 1987, they added.

Both factors supported the pound, and added weight to the argument for rising interest rates by the end of the year. The pound hit USD1.7177 - it's highest levels versus the USD since October 2008 and EUR1.2573 - it's best since October 2012.

Meanwhile the Dow Jones and S&P500 both closed at record highs last night, which continues to see spec money think that there are better financial returns to be had outside of the grains sector.

In other news, a FranceAgricle survey into anticipated French wheat yields found that more than 78% of farmer respondents said that they expected to get average or better yields this year.

French analyst ODA raised their forecast for the EU rapeseed crop to a record 22.5 MMT. Rapeseed yields out of Western France are reported to be showing decent yields of around 3.5 MT/ha, and these are more like 3.5-4.0 MT/ha in the east. Last year's average yield was only 3.04 MT/ha.

Russia's 2014 grain harvest is just getting going, producing 5 MMT in bunker weight so far off 3% of the planned area. Average yields are said to be 3.78 MT/ha, up 8% on this time last year.

The Ukraine Ag Ministry said that the country had exported a record 32.4 MMT of grains in 2013/14, up 41% from a year ago and including 9.4 MMT of wheat, 20.1 MMT of corn and 2.5 MMT of barley.

The Kazakhstan’s Ag Ministry said that their 2013/14 grain exports were 8.709 MMT, up 24% from a year previously.

The French Ag Ministry said that the country's soft wheat exports for the period Jul 13/Apr 14 were up 10% from a year ago at just over 16 MMT.

01/07/14 -- Soycomplex: Beans closed virtually unchanged on front month Jul 14, and up to 10 cents down further forward. Fund selling in beans was estimated at around a net 4,000 contracts. The trade is still adjusting to yesterday's shock from the USDA that US farmers will/have planted nearly 85 million acres of soybeans this year - a record by 7 million or more. It is to be hoped for the sake of the soybean market that there are no hiccups with Chinese demand. The Chinese Ministry of Commerce estimated China’s June bean imports at 6.77 MMT, down only slightly on June 2013 imports of 6.926 MMT. They estimated China’s July bean imports at 5.05 MMT versus July 2013 imports of 7.197 MMT. They said that China has imported 57.254 MMT of beans so far this season compared to 48.799 MMT a year ago. The Brazilian Ministry reported that the country had exported 6.89 MMT of soybeans in June, down from 7.61 MMT in May, but up a little on the 6.50 MMT shipped in June 2013. Dr Cordonnier estimated the US 2014 soybean yield at 45.0 bu/acre, unchanged from his previous estimate. If last night's crop condition ratings from the USDA are to be believed then the cool and wet June that most of the Midwest has had to contend with hasn't yet done any harm to crop potential. The week ahead looks a little drier, which will be welcomed, although temperatures are set to remain below normal. "Most of the Midwest is expecting rain in the 7-day outlook, though the amounts would be less heavy than previously. The Upper Midwest and Great Lakes are slated for at least one inch of rain, locally more, in scattered showers. Much drier weather is expected in a wide swath of the central United States, including Kansas, Nebraska, Missouri and central Illinois. This would encourage strong drying. Sharply cooler weather is also expected to develop in the week ahead, the GFS model predicting temperatures 5-10 F below normal in the Midwest," said Martell Crop Projections. Jul 14 Soybeans closed at $14.00, down 1/2 cent; Nov 14 Soybeans closed at $11.47 1/2, down 9 3/4 cents; Jul 14 Soybean Meal closed at $456.10, down $2.20; Jul 14 Soybean Oil closed at 38.87, up 2 points.

Corn: The corn market closed a couple of cents lower, with fund money selling an estimated net 4,000 contracts on the day. The trade seems relaxed about an overly wet June for much of the Midwest. "The June rainfall map shows how extensive flooding west of the Mississippi River. June rainfall in Iowa was 90% above average with 8 inches of rain. Minnesota rainfall was twice normal with 7.67 inches. Exceptional heavy rain also developed in Nebraska, South Dakota and Wisconsin," said Martell Crop Projections. "The best analog for ultra-wet Midwest growing conditions in June is 2010, a year that finished with a below-average yield in corn, but slightly above-normal yields in soybeans," they added. Dr Cordonnier estimated the US 2014 corn yield at 165.0 bu/acre, unchanged from his previous estimate. Yesterday's acreage number from the USDA was almost exactly what the market expected, although the June 1 corn stocks figure was higher than anticipated. The Xinhua News Agency reported that China has rejected 1.25 MMT of US corn due to GMO "contamination" for the period ending June 6. Some US corn is getting through, but the volumes are relatively small. Shanghai's JC Intelligence say that China imported 79,000 MT of US corn in May. Safras e Mercado estimated Brazil’s second corn crop at 43.976 MMT versus 45.204 MMT a year ago. They said that harvesting of that is 2.9% complete. There are some reports of frost in southern Brazil which may have damaged some safrinha corn. Brazil's Trade Ministry said that the country had exported 87,600 MT of corn in June, down from 126,500 MT in May and 276,300 MT a year previously. Russia said that they'd exported just over 4 MMT of corn for the season through to Jun 25. Ukraine's Ag Ministry said that they'd exported 20.1 MMT of corn in 2013/14. New crop Ukraine corn is now said to be offered as low as $200/tonne FOB, with bids around $193-195/tonne. Recent wet weather in Ukraine is stalling the early wheat/barley harvest, but seen aiding newly planted corn. Jul 14 Corn closed at $4.22 3/4, down 1 1/2 cents; Sep 14 Corn closed at $4.16, down 2 3/4 cents.

Wheat: The wheat market closed around 5-10 cents lower across the three exchanges. Egypt's GASC bought 240,000 MT of wheat in a tender for August delivery. They purchased three cargoes of Romanian origin and one of Russian. The prices paid were around $252/tonne FOB. The cheapest French and US offers were around $259-260/tonne FOB, with more expensive freight to also add on top. Ukraine wheat wasn't offered despite reports that 12.5% milling wheat is quoted in the open market at $248 FOB for August shipment ex Ukraine. Russia's wheat harvest is underway, and yields are said to be improving and are now averaging 3.67 MT/ha versus 3.50 MT/ha this time last year. Barley yields are said to be 4.07 MT/ha against 3.69 MT/ha twelve months ago. There's talk that a frost in southern Brazil may have caused some damage to winter wheat. Their crop was cut sharply by frost around this time of year in 2013. Wet weather on the Plains is holding up the US winter wheat harvest. "Winter wheat producers in Kansas harvested 15% of wheat last week, boosting the total harvested to 40%. Recurring strong showers have bogged down the harvest. Kansas wheat farms received 7 inches of rainfall in June, more than twice the monthly average. Has wheat quality been compromised by heavy rain? There's not been much standing water due to exceptionally dry field conditions to start with. Kansas, Oklahoma and Texas experienced historic drought for several months, winter into spring. Not until mid May did rainfall sharply increase," said Martell Crop Projections. There's also talk of excessive wetness/flooding being an issue in wheat and canola fields in Saskatchewan and Manitoba. Trade gossip suggests that Libya may have defaulted on Black Sea wheat purchases now that prices have dropped. The Ukraine Ministry said that the country had exported a record 32.4 MMT of grains in 2013/14, including 9.4 MMT of wheat. Jul 14 CBOT Wheat closed at $5.59 3/4, down 5 cents; Jul 14 KCBT Wheat closed at $7.00, down 10 1/2 cents; Jul 14 MGEX Wheat closed at $6.57 1/4, down 10 cents.

01/07/14 -- EU grains markets ended the day almost universally lower, in follow through trade after last night's bearish USDA stocks/acreage data.

The day finished with Jul 14 London wheat down GBP3.50/tonne at GBP135.50/tonne, and with new crop Nov 14 London wheat GBP1.50/tonne easier at GBP134.50/tonne. Nov 14 Paris wheat ended EUR1.50/tonne lower at EUR184.25/tonne, Aug 14 Paris corn was unchanged at EUR170.00/tonne, whilst Aug 14 Paris rapeseed fell EUR3.00/tonne to EUR340.25/tonne.

Nov 14 London wheat closed at a fresh contract lifetime low today, whilst Jul 14 closed at the lowest level for a front month since July 2010. Aug 14 Paris rapeseed also traded at the lowest levels seen on a front month for 4 years.

Aside from digesting the USDA numbers, fresh news was relatively thin on the ground. Harvest pressure remains, and so too does a seeming lack of spec money willing to participate, wooed away from the grain sector by the prospect of better returns elsewhere. The S&P 500 finished the Apr/Jun period with its best second quarter advance since 2009, whilst the DJIA is close to all-time highs set in June.

Meanwhile Chicago wheat prices slumped 19% in Q2 of 2014, with London wheat down 15% and Paris wheat tumbling 10%. The speculative money that briefly rushed into the wheat market in Q1 of 2014 following the Russian taking of Crimea, causing a sudden price spike, has now gone away. Will it ever return? I think that for sure it will, but right now when that will be is anybody's guess. Meanwhile the path of least resistance remains lower.

Consumers remain relaxed, and with prices tumbling like this who can blame them? The spectre of another season of cheap imported corn hangs over the market, with the EU expected to import almost as much in 2014/15 as it did in 2013/14. Production of corn in the EU this year is also forecast to rise, not to mention Europe having an anticipated 6-year high (and second largest on record) wheat crop of it's own.

Exports out of the FSU have been a constant thorn in the side in 2013/14, and are likely to remain so for the new season ahead. Ukraine are expecting a second highest grain crop ever, despite all their recent woes. Russia's harvest is also thought likely to be up on last year. Early yield reports out of both are encouraging.

Russian growers have harvested 3.5 MMT of grains off 954k hectares to date (2.1% of plan). Yields are said to be averaging 3.65 MT/ha so far, and increasing as growers get into some of their better looking crops. Wheat yields in Krasnodar are said to be 5.42 MT/ha, a 5.4% increase on a year ago.

Early Ukraine grain yields are reported to be 12% higher than a year ago at 2.79 MT/ha.

APK Inform report that Ukraine seaports exported 30.4 MMT of grains in 2013/14, up 38% on the previous season. That total includes 18.7 MMT of corn, 9.1 MMT of wheat and 2.6 MMT of corn.

The Russian Ag Ministry said that the country had exported 656 TMT of grains in the Jun 1-25 period, including 344 TMT of wheat, 172 TMT of barley and 127 TMT of corn.

That brings the nearly complete 2013/14 campaign total to 25.232 MMT, a 61.5% rise on a year previously. That total consists of 18.238 MMT of wheat, 4.046 MMT of corn and 2.672 MMT of barley plus a small amount of other grains such as rye and buckwheat.

Egypt tendered for wheat for Aug 11-20 delivery, buying three cargoes of Romanian and one of Russian origin. The price paid was said to be around the $252/tonne FOB mark, with around a further $10-11/tonne freight on top. That's very similar to the price paid for Aug 1-10 shipment last week.

30/06/14 -- Soycomplex: The USDA's ability to throw up a surprise is legendary. Their ability to produce one with the June Acreage and quarterly stocks report is bordering on routine, and so it proved again today. They surprised some with a Jun 1 US soybean stocks number of 405 million bushels, around 25 million higher than the average trade guess - the range of expectations was 340-440 million. That's still down 7% on a year ago, but not as tight as many people thought. They then went on to stun everybody by placing 2014 US soybean plantings at 84.839 million acres, that's 11% more than was planted a year ago (76.533 million), 2.6 million more than the average trade guess and 3.3 million more than estimated in March. It was also above the top end of the range of trade estimates of 80.5-84.0 million. "Tight old crop stocks are now a thing of the past and market is now looking forward with USDA to adjust (the) acreage higher in July’s WASDE report which assuming all else is unchanged US ending stocks would be 490 million bushels, near 4 times larger than current and if realised would be largest since 2006/07," said Benson Quinn Commodities. Needless to say the market fell hard, particularly on new crop, following the news. Fund selling was estimated at a whopping 24,000 lots in beans. You will recall that Friday's Commitment of Traders report had them cutting their overall net long position down to just 41,221 contracts as of last Tuesday night. They were estimated to have trimmed that by around 6,000 on Friday on profit-taking ahead of this report, so next Friday's COT report could see them sitting on only a nominal long position. As mentioned on Friday "Are they gearing up to play beans from the short side for a change?" The last time they were net in beans was late 2011, when front month prices hit $11/bu. After the close the USDA reported that 72% of the nation's soybean crop was in good to excellent condition, unchanged from a week ago. That also leans a bit bearish as the trade was expecting a fall to around 70%. It is also 5 points ahead of year ago levels. Emergence was placed at 94%, which is in line with the 5-year average. They said that 10% of the crop is blooming, also on par with the 5-year norm. Jul 14 Soybeans closed at $14.00 1/2, down 31 1/2 cents; Nov 14 Soybeans closed at $11.57 1/4, down 70 3/4 cents; Jul 14 Soybean Meal closed at $458.30, down $11.50; Jul 14 Soybean Oil closed at 38.85, down 113 points.

Corn: The corn market closed sharply lower. This was partly in sympathy with steep declines in beans and meal, but also due to the fact that the USDA again pegged US Jun 1 corn stocks higher than market expectations, just as they had done for 5 of the previous 7 years. They placed those at 3.854 billion bushels versus an average trade guess of 3.722 billion, from within a range of estimates of 3.046-3.950 billion. That figure represents a 39% increase on where stocks were this time a year ago. As far as US 2014 corn plantings were concerned, they were "right on the money" with a figure of 91.641 million acres, almost identical to the average trade guess of 91.725 million, from within a range of estimates of 91.0-92.2 million. It is also only a short hop away from the 91.691 million estimated in March. Plantings in 2014 were a 75-year high of 95.365 million, so this represents a 4% decline on last year and is actually the smallest planted area for corn since 2010. After the close the USDA reported corn crop conditions in the good to excellent category up a point on a week ago to 75%. Many were expecting at 1-2 point cut. To have 75% of the crop rated this high heading into July is unusual, and augurs well for robust yields with pollination coming up. The USDA said that 5% of he crop was now silking versus 9% normally. Fund selling in corn was estimated at a net 18-20,000 contracts on the day. They have also been steadily reducing the size of their net long holding in corn of late. "Global demand for corn remains light as buyers sit back for lower prices regardless of the point of origination. Brazilian prices have broken below support prices and Ukraine is going to need to find a market," said Benson Quinn Commodities. Jul 14 Corn closed at $4.24 1/4, down 18 3/4 cents - the lowest close for a front month since January; Sep 14 Corn closed at $4.18 3/4, down 23 1/2 cents.

Wheat: The wheat market ended with losses of around 15-20 cents across the three exchanges. An attempt to resist the gravitational pull from the corn and soybean pits proved to be futile. The USDA report did offer a bit of bullish content for wheat, placing Jun 1 US wheat stocks at 590 million bushels. That was below the average trade estimate of 598 million (from within a range of estimates of 560-633 million), and 18% down on year ago levels. They did however place 2014 US all wheat plantings at 56.474 million acres, above the average trade guess of 55.818 million and the 55.815 million forecast in March. It is also slightly above 56.156 million from a year ago. Fund selling was estimated at a net 6,000 Chicago wheat contracts on the day, further extending the size of their short position. The USDA reported the 2014 US winter wheat harvest at 43% complete, up 10 points on a week ago, and versus the 5-year average of 48%. Winter wheat rated good/excellent was unchanged on a week ago at 30%. Spring wheat crop conditions fell one point on a week ago to 70% good/excellent. Spring wheat headed was 26% against 29% normally. Mexico are said to be seeking wheat for August shipment. Turkey are looking for 10,000 MT each of milling wheat and barley, both of optional origin, for Jul/Aug shipment. The USDA's FAS in Tunisia raised their estimate for the 2014 grain crop there from 2.2 MMT to 2.36 MMT, up sharply from last year's drought damaged crop of only 1.3 MMT. They see Tunisia's 2014/15 grain imports falling to 1.6 MMT, including 900 TMT of wheat, 300 TMT of durum and 300 TMT of barley. Reuters reported that Algeria had imported 4.86 MMT of grains in the Jan-May period, a 29% increase on a year previously. The USDA's FAS in Kazakhstan said that the country will plant 15.7 million hectares of grains this year, producing a crop of 18.5 MMT, a 5% increase on a year ago. That will include 14.8 MMT of wheat, a 6% rise versus last year. Kazakh wheat exports in 2014/15 will hold steady at 7.5 MMT. Jul 14 CBOT Wheat closed at $5.64 3/4, down 20 1/2 cents; Jul 14 KCBT Wheat closed at $7.10 1/2, down 15 1/2 cents; Jul 14 MGEX Wheat closed at $6.67 1/4, down 15 3/4 cents.

30/06/14 -- EU grains closed mostly lower heading into the USDA's June plantings and quarterly stocks reports. Whilst no major surprises are expected for wheat, these reports regularly throw up an unexpected element for corn in particular, with higher plantings and stocks levels above expectations in five out of the last seven years.

The day ended with the thinly-traded Jul 14 London wheat contract down GBP2.00/tonne at GBP139.00/tonne and with the more liquid new crop Nov 14 London wheat closing GBP1.60/tonne weaker at GBP136.00/tonne. Nov 14 Paris wheat closed EUR2.00/tonne weaker at EUR185.75/tonne, Aug 14 Paris corn was down EUR2.50/tonne at EUR170.00/tonne and Aug 14 Paris rapeseed was EUR4.50/tonne lower at EUR343.25/tonne.

For the month of June that puts London wheat was down GBP8.00/tonne, or 5.4%, with Paris wheat EUR5.75/tonne lower (-3%), corn down EUR3.50/tonne (-2%) and rapeseed EUR350.50/tonne lower (-2%), all basis the front month.

One of the reasons for the disparity between London wheat and the others is sterling strength. The pound rose by 2% against the US dollar in June, and by 1.7% versus the euro.

Another is ideas that excessive rains in some parts of Europe (and Ukraine too) may mean that there's more feed wheat around this year. There's also the competition in feed rations from another anticipated bumper corn crop a little bit further down the line.

The entire market also remains under seasonal harvest pressure. FranceAgriMer reported on Friday that the French barley harvest was 6% complete as of last Monday (versus zero a year ago at this time). Aquitaine (19% complete) and Bourgogne (14%) in the south west and Poitou-Charentes (13%) in the centre/east of the country were the most advanced regions.

Traders say that the French wheat harvest is likely to begin later this week. The German wheat harvest is probably a fortnight behind that. ADAS said that the UK winter barley and oilseed rape harvests are likely to start in a week or two, with wheat harvesting here set to commence a week or two after that.

Anecdotal reports suggest that some rapeseed crops were sprayed off over the weekend in parts of the south east.

"At the end of June most combinable crops are in good condition. Final yields will depend on the weather during grainfill, levels of lodging and harvest conditions," ADAS said.

There's optimism over yield potential given the good plant growth, reasonable disease control (albeit at a cost) and adequate moisture. Most weeds are well controlled although black-grass is an issue in some crops, they observed.

The EU Commission's MARS unit are forecasting UK wheat yields to average 8.05 MT/ha, a 9.1% increase on last season, 7.5% above the 5-year average and the highest since 2008. Barley yields are forecast around 4% up on both last year and the 5-year average, with oilseed rape yields seen more than 26% up on last year and nearly 10% above the 5-year average.

The UK should therefore return to the position of being a net wheat exporter in 2014/15, although those prospects won't of course be helped by the pound trading at a more than five year high of over 1.71 versus the US dollar today. Sterling also remains close to it's best levels against the euro since September 2012.

The Ukraine Ministry said that the early grain harvest there was completed on 557k hectares as of Friday, which is 6% of the planned area. That's produced a crop of 1.556 MMT so far, with yields averaging 2.79 MT/ha. It's only very early days yet, but it is worth noting that this yield figure represents a 12% increase on where things were 12 months ago.

The harvested total includes 1.411 MMT of barley of 497k ha and 142 TMT of wheat off 59k ha. They've also just begun the winter rapeseed harvest, producing 66 TMT off 41k ha.

About Me

Worked in agriculture for over 30 years as a shipper, merchant, trader & broker, but still hasn't got the faintest idea what he's talking about.
Likes beer apparently, so why not do the decent thing an hit the donate button you tight bastard?
He can also provide content for your website like market reports and commodity prices. And if you haven't got a website he can design one for you. In short, the man's a bloody genius.

Disclaimer

All comments on this website are the sole opinion of the author, and are not capable of nor intended to constitute professional advice. Neither can Nogger give any guarantee for the accuracy of any of the information or data contained within this site.

The guy is clearly deranged and you should almost certainly ignore everything that he says.